Impacts of Social Media in Restaurant Business in Saudi Arabia

Student’s Last Name 1
Impacts of Social Media in Restaurant Business in Saudi
Arabia: A Comparison between Social Media Profiles
Author:
Abstract: This project paper attempts to explore the impacts of social media in the business of Saudi
Arabian restaurants. Undoubtedly, the modern generation is largely influenced by social media. A lot
of human activities can be associated with social media influence. Social media, therefore, affects
many businesses in the modern world. Behavioral patterns of millions of registered Facebook, Twitter,
and Instagram users are largely influenced by the Internet, more specifically, social media. Despite a
lot of research covering the concept of social media use, research on the impacts of social media in the
restaurant business is inadequate. The concept of globalization has enhanced the rate of behavioral
change as internet users in distant parts of the world can influence each other by uploading posts to
social media platforms. Fashion, entertainment, and eating patterns are some of the patterns that are
highly vulnerable to social media. This research project specifically analyzed the vulnerability of
restaurant businesses in Saudi Arabia due to social media. Both quantitative and qualitative data were
collected through a survey of social media profiles for five restaurants in Saudi Arabia. The findings
from these social media profiles were related to the evidence in the literature review. Using tables and
pie charts, the data collected was effectively presented, analyzed and interpreted. Relevant
recommendations and limitations of the study project were further stipulated. The study concluded that
when utilized correctly, social media has a positive impact on the performance and profitability of
restaurant business premises in Saudi Arabia.
1.0 Introduction
Since the conception of social media, millions
of people have registered to the many social
media platforms. The increasing social media
usage may be attributed to the increasing
availability of smartphones in the market and
accessibility to the internet. In the United
States, only 8% of the American citizenry
using internet used social media platforms by
2005 (Boulianne, 2015, p. 535). At present, the
scholar asserts that almost everyone in the
country has a social media account. In Asia,
the situation is not much different. In Asia,
social media platforms such as Facebook,
Twitter, and Instagram attract millions of
customers who in many cases incorporate their
business practices to social media (Parveen,
Jaafar and Ainin, 2015, p. 6). A study by
Karapanos, Teixeira, and Gouveia (2016, p.
891), Facebook has about 1.2 billion active
users; Twitter has about 255 million users
while LinkedIn has about a million users. In
businesses, social media is widely used in

Student’s Last Name 2
business-to-consumer (B2C) companies and in
some cases, business-to-business (B2B)
companies (Jussila, Karkkainen and Aramo-
Immonen 2014, p. 607). B2C optimally utilize
social media by advertising their products and
marketing. Businesses exploit social media
networks to educate their esteemed customers
and clients on issues regarding change and
improvement of products by a business. In
many cases, businesses also share their social
media handles so as to get their customers’
feedback. To exploit the increasing
consumption of social media, large business
and medium-sized entities use social media for
the purpose of advertising, communication,
and gathering of feedback from their clients.
Recently, restaurant businesses have emerged
as one of the big beneficiaries of social media.
According to Kim, et al., (2015, p. 45), social
media is now the most utilized marketing
technique by restaurateurs. The scholars state
that in modern restaurant businesses, 80% of
the communication is done through social
media. The rationale behind the wide use of
social media in the restaurant business is the
fact that there is a low cost incurred. Other
marketing techniques may attract high costs,
which are detrimental to the profitability of
restaurants. In addition, the widespread use of
social media across the world makes it a viable
method to post adverts, market and receive
both positive and negative feedback from their
customers. Big restaurants and companies
measure their relevance in the market (Xie,
Zhang and Zhang, 2014, p. 2). To show their
relevance in the market, beverage producer
giant, Coca-Cola was the first company to
surpass the 50 million likes on Facebook
(Kohli, Suri and Kapoor, 2015, p. 8).
Moreover, there is relatively increased freedom
while advertising and marketing using social
media techniques as compared to other
marketing techniques.
1.1 Research Objectives
The main aim of this project was to determine
the impacts of social media in restaurant
businesses located in Saudi Arabia. The
findings were used to provide comparative data
on businesses with social media profiles which
could be used in establishing universal
guidelines that could be used by restaurateurs
to improve on efficiency and performance
through social media campaigns. To elevate
their efficient use of social media so as to
generate publicity, improve their brand image
and increase their revenues, reaching the
objectives could be vital.
1.2 Research Questions
To achieve the aforementioned research
objectives, answering the following questions
was critical. The research sought to
investigate:
1. How social media affected the sales and
revenues of restaurant businesses in Saudi
Arabia?
2. Did technological development make Saudi
Arabian restaurants more or less accessible in
running their businesses?

Student’s Last Name 3
3. What were the future trends and how should
Saudi Arabian restaurant companies have dealt
with them?
These questions were designed to help us
understand the basis of the research objective
which was to investigate the impacts of social
media in Saudi Arabian restaurant businesses.
These questions were sought to be answered
through surveys done from five restaurants’
social media profiles located in Jeddah City,
Saudi Arabia.
2.0 Literature Review
In a research project, a theoretical literature
review is important as it brings forth existing
theoretical precepts that have not been
rigorously assessed and examined (Dembek,
Singh and Bhako, 2016, p. 231). The section
purely dealt with existing scholarly evidence
concerning our topic under investigation. This
chapter discussed the many scholarly works
that have been written to discuss the impacts of
social media in the restaurant industry.
2.1 Theoretical Background
Due to the fact that most businesses use social
media only as a marketing tool, most of the
available research concerned with the impact
of social media is done from a marketing point
of view. In many cases, the research from
many surveys suggests that there is a positive
correlation between a restaurants social media
use as a marketing tool and the said firm’s
improvement in performance and value (Kim,
et al., 2015, p. 41). Despite the topic of social
media use in businesses attracting a lot of
influence in the recent years, the academic and
the business communities have mixed feelings
regarding how the effectiveness of social
media tools should be measured. The
controversial debate seems to be unending and
is getting even fiercer. Some scholars measure
the effectiveness of social by directly
comparing the firm to other business firms in
the same industry. On the other hand, some
scholars hold that analyzing the ratio of return
to investment of social media on companies
and brands has arisen as a vital aspect in
measuring the general performance of any
business organization. A balance needs to be
drawn between the expenditure on marketing
strategies using social media and the returns
brought forth by the particular investment
(Baxter, et al., 2014, p. 350). In most cases,
researchers neglect the economic impacts of
social media such as the relationship between
social media activities and the financial
performance of a firm.
The beliefs that social media is an efficient and
reliable channel to profits drive towards many
firms’ decision to engage it (Hudson, et al.,
2015, p. 69). Previous studies suggest that
marketers can gain competitive advantage by
using social media as their marketing
technique. A revelation made by Effing and
Spil, (2016, p. 5) confirmed that utilizing
social media for marketing enabled smooth
communication between business and clients
without the restriction of time. Many
businesses offer 24-hour customer service to
their clients. Apart from serving customers in a
24/7 basis, social media has enabled the

Student’s Last Name 4
conception of a framework which deals with
complaints and comments expressed by both
satisfied and dissatisfied clients regarding the
products a firm offers (Ryschka, et al., 2016, p.
199). This functions to help a firm develop
strategies to deal with the raised issues and
therefore the eventual improvement of the
firm.
Firms also rely on social media to know
whether they are gaining or losing customers
in the market. This can be seen from the
number of ‘likes’, ‘unlikes’ and other reactions
in the social media jargon. Moreover, when
used correctly, social media may curb the
problem of misinformation and raise brand
value. The above evidence means that if
restaurants can correctly use social media
platforms, higher financial performance is
almost inevitable. Appropriate use of social
media leads to higher profitability, burgeoning
customer bases and increased efficiency (Bilal,
Ahmed and Shehzad, 2014, p. 8).
2.1.1 Effects of Social Media Use on Financial
Performance of the Organizations
Researchers have analyzed the relationship
between social media and the financial
performance of many organizations by
analyzing social media as a marketing channel.
Schneirderjans, Cao and Schneiderjans (2013,
p. 916) examines how financial performance
can be improved by the use of social media.
Using text mining technique, the scholars
gather and analyze evidence from social media
platforms including Facebook, Twitter, blogs
and corporate websites. According to their
study, social media strategies influence a
firm’s financial performance. In their study
based from the findings from 150 publicly
traded organizations conducted between the
months of January and March, the scholars
found out that the usage of social media
techniques is very directly related with firms’
financial performance. Social media platforms
significantly boost financial performance if
any organization.
In Malaysia, Parveen, et al., (2015, p. 5)
explored the effects of social media on the
performance of organizations. Using
naturalistic and interpretative methods, the
scholars analyze the effects of social media in
different factors in their natural settings. The
scholars’ used inductive analysis to draw
themes and patterns that facilitate the general
idea that advertising and branding are
enhanced by the effective use of social media
platforms. The study also discovered that most
organizations use social media as a method of
positive word-of-mouth advertising. Existing
clients are thus re-attracted to their favorite
joints. The studies’ results prove that social
media use contributes a significant influence
on a firm’s performance and productivity. The
strength of any business organization can be
tested either through the financial strengths or
the customer service or client relations offered
by a firm. Proper financial management and
customer relations are vital to any growing
company as a company’s cost is further
reduced. Customers also access free
information. Although the research uses a large
sample to establish a relationship between